Baofeng Energy: Company's Partial Equipment Capacity Utilization Rate Exceeds 100%

An investor asked Baofeng Energy (600989.SH): The second and third lines of the Inner Mongolia Phase I project were only put into operation at the end of last year and the end of the year, respectively. After full production, Baofeng’s polyolefin capacity is only 520,000 tons. Why did the total output last year already exceed 5.2 million tons? Is it because the Inner Mongolia project uses more advanced technology and has greater production flexibility?

On March 24, the company responded that its olefin capacity is 5.2 million tons per year, and polyolefin (including EVA) capacity is 5.5 million tons per year. According to the company’s 2025 annual report: the capacity utilization rate of the Ningdong olefin project in 2025 is 105%; since the second 1 million-ton-per-year production line and the third 1 million-ton-per-year production line of the Inner Mongolia olefin project were respectively put into operation in January and March 2025, the weighted actual capacity is 2.67 million tons per year for polyethylene and polypropylene. Based on this calculation, the capacity utilization rate is 104%. The company’s partial device capacity utilization exceeding 100% is mainly due to its comprehensive advantages in production management and process technology, enabling continuous optimization and efficient release of plant operation efficiency.